Adjust an employee's leave balance

Edit an employee's annual leave balance in their payslip during a pay run, so they receive the correct entitlements.

When do I adjust an employee's leave balance?

  • The employee's base hours change
    • If an employee changes the number of weekly hours that they work and they've annual leave remaining, you'll need to run a nil pay and adjust the annual leave balance.
    • For example, an employee works a 40-hour week and they've passed their anniversary date so have four weeks (160 hours in Xero) annual leave entitlement. As they've already taken two weeks (80 hours), they have two weeks (80 hours) remaining. If they then reduce their hours to a 20-hour week, the remaining weeks now total 40 hours and you'll need to deduct 40 hours from the annual leave balance.
  • Transferring annual leave
  • The employee's holiday pay balance is higher or lower than expected
  • If your employee’s holiday pay balance is too high or too low, even negative, it’s likely either:

    • You haven't entered the opening Holiday Pay balance correctly
    • Your employee’s opening holiday pay balance doesn’t equal the percentage of gross earnings you expected to see since their last anniversary date

    Troubleshooting your employee’s leave balances

    Create a leave type and assign leave

    Depending on the leave you're transferring, you might have to create a new leave type and assign it to the employee before you can transfer it in the employee's payslip.

    You don't need to create a leave type for cashing up annual leave as it's already set up in Xero.

    Edit an employee's leave balances

    1. Once you've created any required leave type and assigned it to the employee, create an unscheduled pay run.
    2. From the draft pay run, click the name of the employee to open their details.
    3. Under Leave Accruals in the relevant leave line(s), enter the leave adjustment amount.
    4. Click Save & Close.
    5. Process the pay run.

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